WASHINGTON -- The SEC said it has distributed more than $103 million to investors who lost money because of mutual fund market timing and late trading involving Banc of America Capital Management LLC and several of its affiliates.
The distribution is the first in a series that will return approximately $375 million to more than 1.5 million harmed investors and more than 525 affected funds as part of the Commission's 2005 settlement with BACAP, BACAP Distribu-tors LLC, and Banc of America Securities LLC, SEC said on June 18. The firms had been charged with facilitating market timing and late trading in Nations Funds mutual funds and others.
The latest distribution went to more than 130,000 harmed investors in the Nations Funds and more than 380 unaffiliated mutual funds.
The SEC said it brought and settled public administrative and cease and desist proceedings in 2005 against BACAP, BACAP Distributors and BAS. Each consented to a commission order charging anti-fraud violations without admitting or denying the SEC's findings. The commission ordered the respondents to pay $250 million in disgorgement and $125 million in civil penalties for distribution through a fair fund. In addition to disgorgement and civil penalties, the respondents also consented to a cease-and-desist order and a censure, and agreed to undertake certain compliance and mutual fund governance reforms.
The Sarbanes-Oxley Act gave the SEC new authority to distribute financial penalties paid by securities law violators directly to injured investors. Using this authority, the commission said it already has distributed more than $3.9 billion in fair funds. Earlier this year, it created the new office to further expedite distributions.